Australia Post to axe 900 jobs

Labor is prepared to help the Abbott government throw a lifeline to Australia Post, which faces a revenue crisis in its letter division, by allowing it to deliver Medicare and welfare operations.

Fairfax Media understands senior Labor figures, including opposition communications spokesman Jason Clare, have decided not to play "raw politics" with the issue after being convinced of the seriousness of Australia Post's financial woes.

But the stance could ignite a stoush with the Labor Left and the union movement, which argues that handing more front-line duties to Australia Post would lead to job losses and longer queues at the post office.

The busiest day of the year at Preston Australia Post office. Photo: Simon Schluter

Acting Prime Minister Warren Truss said on Sunday that Australia Post faced a revenue "crisis". Fairfax Media has reported Australia Post would axe 900 jobs this week, a revelation that has devastated the organisation's 32,000-strong workforce.

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Mr Truss said postal services should be maintained to regional areas but it would be fair to expect city residents to visit the post office more often.

Australia Post is pushing to be allowed to deliver mail two or three days a week, rather than the five days required by government regulations. Customers wanting more frequent delivery would pay more.

The company also wants to shore up the viability of post offices by delivering more government services, an idea backed by Communications Minister Malcolm Turnbull in March.

Australia Post has been lobbying both sides of politics on the need for major changes, with private modelling indicating the company would lose $7.1 billion through to 2022-23 on its present path.

Mr Clare said: "We support expanding the number of government services provided at post offices.

"Australia Post has challenges. The number of letters it delivers every year is falling and its mail delivery service is losing money."

Mr Clare, a member of the Labor Right, supports allowing Australia Post to deliver some over-the-counter Medicare and Centrelink services, such as distributing payments or collecting forms. More complex tasks, such as case work, would remain with the agencies.

But opposition human services spokesman Doug Cameron said transferring more government responsibilities to Australia Post was "not a practical proposition".

"I don't think there are the skills or capacity in Australia Post to deliver Centrelink or Medicare services," he said.

The Community and Public Sector Union has said Australia Post staff were not trained to cope with the aggression and abuse Centrelink staff often receive from customers.

22 comments

As I understand it Australia Post is still making a profit, it's just the letter division that isn't. That said, profits made by the other divisions, particularly parcel delivery seem to be covering the shortfall handsomely.

Now, the letter division was and is a business model under threat as soon as the Internet came into being. First e-mail and then the Web obviated a lot of the need for letter delivery ... so it was to be expected that it would decline. Little numbers like electronic banking, e-commerce and online payments simply accelerated this trend ... that had been obvious since the 1980's.

That said, other Australia Post activities seem to have taken up the expected slack quiet handsomely ... parcel delivery, Australia Post shops, banking and other services (and I note they have put in bids for Medicare and social service delivery now) seem to be paying off handsomely and yeilding excellent dividends for the government.

Seems to me that this whole things is simply a bid to relieve AP of a social obligation or make it less onerous. Telstra has tried the same play at one tie or another with its USO, and rightly failed even though it is now fully privatised ... that is a problem with being the dominant market player.

But, that the media seems to be running with what AP's PR machine is handing out, and printing relatively uncritically is disappointing. One would expect some sort of critical analysis of what is being proposed in the context of Australia Post operations generally, and how the enterprise is doing on a 'whole of business' basis is critical to that.

Seems to me carrying the costs for a failing division is a small price to pay for market dominance in others.

Commenter

Frank O'Connor

Location

Rye

Date and time

June 09, 2014, 8:35AM

Good points Frank

If you look at the profits of Australia Post they have been on the incline for years, they as far as i understand have already made redundant some 1000 people since the current CEO / MD came into the job now a further 900 to go the question is ...how many more?.

Also when at the NAB the current CEO did the same thing, yes the company i would suggest does have to transform etc but is cutting 2000 jobs the way to do it?, lets not forget the CofA recommended many things one of them was to jettison 12% of it workforce that equates to 4000 people !!! Is that what the CEO is doing?

Commenter

Buffalo Bill

Location

Sydneys Northshore

Date and time

June 09, 2014, 9:13AM

Yes Frank your assumptions are quite correct. The market has been changing and no doubt will continue to change as technology gathers speed and becomes more widely accepted. Overall AP is making a reasonable return for the Government and subsidizing the mail delivery section. AP has a legal obligation to provide a service and it is a Government organization. It should continue to do so whilst AP maintains a reasonable profit.

Commenter

Glenn

Location

Newcastle

Date and time

June 09, 2014, 9:16AM

Excellent comment Frank very well said and put . Though I would say the typical Liberal Autobots , would scream sack them all , sack them all . Also your comments about Social Obligations , well that's one thing Australian Business wants to avoid at all costs these days its all about profits

Commenter

John

Location

Wynnum

Date and time

June 09, 2014, 9:24AM

You are of course correct Frank.

A simple google tells us that AP's after tax profit in 2013 up to $311.9 million from $281.2 million in 2012. A return on equity of 18,5% for the sole shareholder, the Australian government.

Surely there are other areas of government responsibility that require some work before worrying about AP.

Maybe a look at defence procurement? Ships being built off shore and lemon flavoured jet fighters are easy example of waste.

Commenter

Paul01

Location

Riverina

Date and time

June 09, 2014, 10:40AM

AUS POST will be sold, this is a FACT, but first govt wants to trim the cow then fatten it to get bigger price. The thick as usual ALP are about to co-endorse and assist that sale. Jobs cut, services trimmed and price rises at consumers and Australians expense, Then the sale. This is why Govt wont rule out a sale in this term. The politically irrelevant ALP as usual, is blindly supporting the sales grooming. PUP seems set to block a sale, therefore big cuts and trimming of services shall occur for non event. From day one the sale was evident the day LIB lobbyist ACCC ex chief tries to canvass the sale for Tony and co.

Commenter

Brian Woods

Location

Glenroy

Date and time

June 09, 2014, 12:30PM

@Brian Woods I expect you are right that the Libs will try to sell Australia Post just the state Libs are trying to sell the rest of the electricity network even though according to the figures published the state and consumers stand to lose hundreds of billions in the decades following the sale. It is incredibly short sighted.

Commenter

Good Logic

Date and time

June 09, 2014, 1:53PM

Reducing urban mail delivery to 3 days a week with a urgent mail service for a higher price should be acceptable to most urban dwellers. I cannot remember the last time I received anything that could not have waited another one or two days by daily mail delivery. Australia Post should be able to move some of the displaced workers to their retail outlets and reduce the constant queues of customers. The improved service may actually increase business.

Commenter

Peter Stanton

Date and time

June 09, 2014, 9:12AM

The difference to me in getting the mail 3 days per week as opposed to 5 would be exactly nothing. My local PO delivering Medicare and Centrelink services? Madness.

Commenter

Ant

Location

Melbourne

Date and time

June 09, 2014, 9:19AM

Australia Post is a public utility, not a 'company'.Same as power and water utilities.Public utilities are not commodities to be sold off to Eddie Obeid's and Chris Hartcher's mates at bargain basement prices.Long live public utilities.